2nd September 1998 Archive

"Bill Gates . . . displayed a particular failure of recollection at his deposition," the Department of Justice says in the publicly-filed, heavily-censored version of its response to Microsoft's motion seeking summary judgement (dismissal) of the DoJ's case. This recollection problem of Gates has confused Microsoft watchers, who are united in their opinion that Gates has a very good memory indeed. The DoJ also makes another observation: "Mr Gates' testimony appears to be part of a pattern of Microsoft attempting to rewrite history. For example, . . . " and at this point the censorship begins again. The same memory affliction has affected Microsoft executives who are stated to be the author of documents but "claim not to remember writing them . . .recipients of documents claim not to remember receiving them. And both authors and recipients claim not to know what the documents mean." Witnesses also claim "they don't know what a browser is," the DoJ notes. The DoJ's 89-page court filing squarely counters Microsoft's motion "to create a virtual exemption from the antitrust [unfair competition] laws for Microsoft" and "to permit a software monopolist such as Microsoft to use anti-competitive means to entrench and extend its monopoly without fear of judicial intervention." The most detailed part of the DoJ's filing is concerned with setting out how Microsoft countered Java and Netscape's browser in order to maintain "the most durable monopoly in the economy today". There is a strong suggestion that the DoJ has unearthed "smoking gun" documents that will be produced at the trial, but which are not yet made public. There will be a brief hearing in the federal court in Washington on 11 September to determine whether the case should be dismissed. From the evidence that the DoJ has been able to disclose, legal observers feel this is most unlikely. It is also considered doubtful that Microsoft would appeal if it loses on this issue, in order not to upset the Microsoft-sympathetic court of appeals should it need its services later. ® Related informationUS Government vs Microsoft

In a brief quietly filed in the Washington DC court of appeals on Tuesday, Microsoft has asked the court to confirm that the depositions taken from Bill Gates and Microsoft executives will remain forever secret. An application to Judge Jackson to attend the deposition of Gates and other executives was initiated by Reuters and joined by a number of media organisations. The law allowing this is the Publicity in Taking Evidence Act of 1913. Judge Jackson reluctantly had to grant permission because the law was clear on the matter. Microsoft immediately appealed first to Judge Jackson, who said he had no latitude in the matter, and then to the court of appeals where Microsoft was granted a temporary stay. The start of the main hearing had to be delayed for two weeks because the depositions were suspended pending clarification of whether the press would be admitted. Microsoft had already obtained what is known as a protective order to keep all internal documents confidential, although this is currently being challenged by motions to unseal the documents. Microsoft says its reasons for wanting to keep Gates' and other Microsoft depositions secret is that the testimony deals with "competitively sensitive information", but leaked information and a document filed on Monday by the DoJ suggest that it is the contemptuous behaviour of its witnesses that Microsoft wishes to keep secret. Microsoft's arguments in its brief are based on different procedures being used when the law was enacted. ®

It was U-turn time on the US markets on Tuesday, with a record Nasdaq gain of 76 points or nearly 5.1 per cent to 1575. In New York, the stock exchange had its heaviest ever trading day with the Dow Jones industrial average up 288 points or 3.8 per cent to 7827. On average, around half the losses of the previous day were recovered by most of those who did not panic and sell earlier in the day. Volatility is very pronounced in that the Dow's daily range was nearly 500 points, with initial rallies collapsing before a strong recovery later in the day led by technology stocks. Most technology stocks gained some of the ground they had lost the previous day, with the noted exception of amazon.com which further slipped 3 3/4 to 80 on downgrading by a financial analyst. Dell and Cisco both gained more than 8 per cent, SAP's American depositary shares put on 7 3/4 to 49 5/8, but its rival PeopleSoft was down 4 9/16 to 32 11/16. There was some blood letting in the UK, with London Bridge Software down 28 per cent to 900 pence, Misys down 13 per cent to 23.04 pounds, and Sage off 12 per cent to 11.375 pounds. Even established mobile telephone companies like Vodafone and Orange were off 11 per cent and 14 per cent respectively -- making them a buy, according to sector analysts. The Philadelphia Semiconductor Index jumped 5.4 per cent, with US technology indexes showing gains in the 6 to 7 per cent range.®

October will see the introduction of the new Mac OS 8.5 operating system, according to Steve Jobs -- still designated as Apple's interim CEO – said in a keynote address to the Seybold 98 publishing trade show in San Francisco. Jobs called the upgrade, previously code-named Allegro, a "must have" particularly because of its "faster than NT" performance on networks. It also has Sherlock, a technology that allows users to search the Internet or local hard drives without using a browser. The next version of Apple's operating system, OS X, was announced for the fall of 1999. Other software announcements included WebObjects 4 for the development and deployment of Internet applications, said to be available by early October. Intergraph announced the immediate availability of its workstations with Apple's Quick Time 3 Pro for NT. On the hardware front, Apple announced 333 and 300 MHz servers with PowerPC processors, and G3 notebooks. Apple is evidently keeping to its Mac roots and publishing/media focus, and gaining the confidence of developers again. An independent sign of this was seen when Adobe announced that it would be producing its new K2 page-layout program for the Mac, with no announced plan yet for NT release. Apple appears to have stabilised itself with three successive quarters of profits. ®

Novell made three product announcements yesterday: Novell Directory Services (NDS) for NT 2.0, GroupWise 5.5, and an integration solution for thin clients using NDS and Z.E.N works. Novell pitches NDS for NT as a way of managing heterogeneous environments of NetWare and NT, with the former controlling the latter. An NDS replica can now reside on local NT servers, so that remote offices do not need to manage NT domain trust relationships locally. Novell believes this will allow significant savings through a single point of management, without any requirement to manage domains. The beta is available for testing, and the finished product is slated for final release in Q4. GroupWise is Novell's collaboration solution, which is now shipping. It has some 13 million users according to IDC, and holds second place in the market. Although GroupWise can handle mixed NetWare and NT platforms with Mac or PC clients, support for Unix clients and servers is not yet available. Novell has finally developed a directory-based approach to managing thin clients by means of a collaboration with Citrix. Citrix's WinFrame and MetaFrame can now integrate with NDS and Z.E.N. works (zero effort networks). Novell says that Windows applications can be run via NDS over the Internet or local network from any PC, network computer, dumb terminal or thin client that can run a browser. Z.E.N. works is also compatible with NTS 4.0. Availability is this month. ®

Giants Hitachi and Mitsubishi yesterday announced they would shut down facilities in the US, as the worldwide drop in semiconductor sales took a further toll. Hitachi said in a statement that it was making 650 staff redundant at a fab in Texas and announced it would also merge its US semiconductor and micro systems business. It blamed the worldwide glut in DRAM as the reason for the closure. Two months ago, rumours surfaced in Japan that Hitachi was to exit the DRAM business in the early part of next year. Hitachi denied those rumours at the time. Meanwhile, Mitsubishi also announced that it would shut an assembly and test plant in Durham, North Carolina, on the 6th of November, with the loss of around 250 jobs. It too said it would restructure its business in the US, merging its semiconductor unit with its electronic device group. It said it had taken the action to ensure that it remained competitive in the semiconductor market. ®

Market research company Semico has forecast a continuing decline in the DRAM market with the only light at the end of the tunnel being a demand for higher density DIMMs. The company said that revenues will decline by 19 per cent in 1998 and amount to $14 billion. But because of the lower average selling prices, the average size of memory in a PC increased. Semico said that the pressure on prices, coupled with over production, meant that the number of players will decline, with dropouts exceeding new entrants into the market. That is because startup costs for DRAM plants are very high. The other reason, Semico said, was that producing PC100-compliant modules requires design expertise, assembly expertise and exacting performance test capabilities. The report said that Samsung and Kingston were number one and number two in the worldwide market. The report coincides with other marketing information which suggests that the sweet spot, if there is one under the currently sour market conditions, is in high performance synchronous DRAM modules. ®

Sun Microsystems has released details of its roadmap up to the year 2002, with its UltraSPARC V chip reaching a speed of 1.5GHz. The company claimed that the processor family will continue to be a performance leader and that it remains committed to the architecture. Mel Friedman, president of Sun’s Microelectronics division, said: "The SPARC architecture is central to Sun's success and we arecommitted to providing systematic performance improvements with this architecture." The roadmap, which covers all three lines of Sun’s chip family, shows that in its S series UltraSPARC II will have a clock speed of 480MHz next year. In the UltraSPARC III family, there will be 600MHz and 750MHz processors and the UltraSPARC IV will clock at 1GHz. The integrated (I) series chips will include system functions with 400MHz, 440MHz, and 480MHz versions of the UltraSPARC Iii shipping next year. The UltraSPARC IIIi willl come at speeds of 600MHz and 700MHz. The last line, the embedded or E line, is aimed at thin clients, network interfaces and control and line cards, said Sun. Versions of this processor will clock at 300MHz, 400MHz and 500MHz. Texas Instruments fabs Sun’s chips, and the company said that some of the processors will use the process technology that company introduced at the end of last month. ®

Hyundai has claimed a breakthrough in the creation of memory chip with ferro-electric properties. The 256Kbit FeRAM is based on metal rather than silicon technology, and can operate at three volts, provide fast performance but is also relatively inexpensive to manufacture. The FeRAM is the result of a joint venture between Hyundai and US companies Symetrix and Celis, according to reports. The devices, because of their low power consumption, will be used for mobile applications, including notebooks, PDAs and telephones, where battery life is at a premium. ®

Computer Associates announced it had bought privately owned Notes software company QXCOM for an unspecified amount. CA already had an agreement with the company to license and supports its QX/Tools product, which is suite of eleven software programs for database administration and security of Notes databases. The acquisition of the company will also mean that CA will be able to integrate it with its own offering, Unicenter TNG Lotus Notes/Domino. CA recently bought Realogic, another company which made its money from supporting Lotus Notes. Said Marc Sokol, a Computer Associates VP: "One of CA's goals is to be a comprehensive source of products and services in management, administration, deployment, enhancement and support of the growing Notes infrastructure." ®

Time Computers has added another dimension to its sales operations with the announcement that it is to sell its computers through rented space in Office World, the Swiss owned retail superstore operation. Time, the system building arm of Lancashire-based Granville Technology, will become the third in line to take the in-store computer concession in some of the 120 UK Office World shops after first Escom and then Specialist Computer Holdings subsidiary Byte vacated the premises. Escom over-expanded its operations and went bust allowing Byte Computer,to move into the space. Loss-making Byte, the UK's second biggest computer superstore chain behind Dixons Stores Group, was subsidiary PC World was bought out earlier this year.during its tenancy and left the space empty again. Office World dismissed suggestions from The Register that its computer concession was a poisoned chalice. According to a representative, Byte had sold well in its stores and would still sell through its stores, had it not been for the takeover. "This arrangement is a very good opportunity for a company like Time to get its computers into areas it would otherwise find harder to reach," she said. Time already sells through mail order and through a concession deal with white-goods chain Powerhouse. It is also busy opening up its own showrooms across the country. No-one at the company could be reached for comment about the new sales medium.®

Reports from South Korea said that a potential agreement between the top five chaebols to swap business units has fallen apart, with LG Semicon and Hyundai, in particular, sharply disagreeing over the swapping of their semiconductor businesses. Tomorrow’s (Thursday’s) issue of the Korea Herald reported an official from the Federation of Korean Industries as saying there were sharp differences between the two conglomerates. An LG Semicon representative was reported as saying that it had no intention of giving up control of a unified semiconductor company to Hyundai. Hyundai wants to take over LG Semicon’s business but the two companies disagree over which of them has a controlling stake. The further twist in the long-running saga will not be welcomed by the rest of the memory industry across the world. Plummeting DRAM prices have squeezed memory distributors’ margins to the limit, while there are reliable reports that the European Union will investigate whether Korean companies have been dumping memories at below cost price. There is a deadline of 10 September for the talks. ®

Hard disk veteran Alan Shugart, fresh from his brush with the Seagate board of directors, has become a member of the board of Cypress Semiconductors. Cypress’ main line of business is static RAM (SRAM) , and other semiconductor products. He takes up the position 3Com’s CEO and chairman occupied before he was named chairman of the board of Cypress at the end of July. T.J. Rodgers, the Cypress president and CEO, said: "Al Shugart is a Silicon Valley fixture. We look forward to tapping his expertise as Cypress draws closer to its current goal to become a $1 billion company." Shugart founded Seagate in 1979 and in a shock move last July was ousted from the board of directors, following poor financial results which has resulted in the layoff of many staff during this year. ®

It's been a hot and sticky summer for most of the UK over the last couple of months, but still not hot enough for some. Networking software company Cablesoft is turning its back on London and relocating to Arizona, claiming the warmer weather and a skilled workforce will boost its performance. Leaving behind a staff of four, the $40 million company has turned itself inside out to complete the move - the Arizona-based subsidiary company has been transformed Phoenix-like into the headquarters while the old HQ in London is now little more than a distribution hub. Cablesoft president and CEO, Pete Pela, said: "Looking at the international business community, we felt a move to the United States was imperative if our software development and sales were to attain their full potential." Not to mention getting your suntan up to its full potential as well, eh Pete? So it's 'My Old Man Said Follow The Van' for the four unlucky Cablesoft employees to be left behind in the Smoke and 'I've Been Through The Desert On A With No Name' for their erstwhile workmates. ®

VERITAS Software is to acquire storage software specialist TeleBackup Systems. Following the takeover, TeleBackup's remote backup and restore product called TSInfoPRO is to be integrated with VERITAS' NetBackup solution. According to the companies, this will extend NetBackup's centrally managed backup/restore capabilities, thus giving VERITAS an opening in the remote Windows PC market. Mark Leslie, president and CEO of VERITAS Software, said: "As more and more users are working from home and from the road, and storing mission-critical data on their laptops and PCs, [this acquisition] will enable us to improve our coverage of the expanding enterprise." Byron Osing, president and CEO of TeleBackup, commented: "With the momentum surrounding VERITAS as the premier end-to-end storage management software company, we feel strongly that TSInfoPRO will become the industry standard for network backup of remote laptops and PCs". Under the terms of the deal, TeleBackup, all its research and employees etc, will become part of VERITAS in exchange for approximately 1.7 million shares of VERITAS stock. The swap is still subject to shareholder approval, but is expected to go ahead and be completed by the end of 1998. Both boards of Directors have approved the takeover.®

Following the announcement of its first half results, Psion has said that it is in talks with Matsushita and other industry players about taking a minority equity stake in the recently formed Symbian venture. Symbian was started with Nokia and Ericsson earlier this year and Motorola is due to sign up next month. At that stage, Psion will have 31 per cent of the venture with the others holding 23 per cent each. David Potter, Psion chairman, confirmed the company was involved in talks, but was cagey about details. "There are some key players in this industry and it might be that there will be some small participation by some of those key players, " he said, mentioning Sun Microsystems and IBM. The company said its results showed it was now in a strong position for long term growth, after a difficult transitional period. The Symbian venture was major progress towards the new way of doing business, Potter said. In the first six months of 1998, the company recorded a pre-tax profit of £4.113 million on turnover of £74 million. This is up from last year when Psion reported turnover of £64 million and pretax profits of £4.051 million. Shares gained 25 pence on the back of the news. Sale of palmtops fell in the first six months of this year by 11 per cent accounting for £37 million of the company's £72 million turnover. Potter said that the launch of Series 3MX would turn this around: "The series 3 will now grow or recover and have wider sales," he said. The company would not withdraw from the US market, despite its weak position. Potter said that the strategy in the states would continue to focus on working with companies like Novell and Lotus, rather than the retail side. ®

His Billness breezed into London Town today to address resellers, The Register learns. The occasion was called Community Outreach. Pardon us, but in this country that's usually applied to social services and such a scheme involves making sure tramps and vagabonds get fed and clothed....

The rapid decline in prices PC server market will start to fall off over the next few years, despite continuing intense competition. According to research from Computer Economics, a US market research firm, prices will start slow their descent in 1999. Prices will continue to fall through to 2000, but with less pace than in 1998. The company predicts prices will fall by around 19 per cent on departmental and enterprise PC servers over the next two years. The work group and entry level market will drop further, shedding 23 per cent from its prices in the same period, according to the report. "Base configurations will continue to improve just as they will in the desktop market. Buyers will gain on related fronts as disk drive price continue to fall and prices for additional memory remain low," said Michael Erbschloe, director of research at Computer Economics. More information is available if you register at the Computer Economics home page. &reg:

Fujitsu is selling refurbished notebooks through its web-based sales facility, FPC Online Outlet... but only in the US. The company says that the service is there to meet the demand in the SOHO and consumer markets for low cost, but proven technology. The site currently has refurbished notebooks from the LifeBook range, initially the LifeBook 400 and 700 Series, for sale. he company plans to make notebook accessory products available soon, such as docking stations presentation and travel accessories, Fujitsu-compatible hardware accessories and carrying cases. "The Online Outlet is a significant extension of FPC's online presence and another great example of how practical supply chain management can benefit the customer," said Bert Parekh, FPC's director of marketing. He said the move would lessen the time between order and fulfilment.® Fujitsu says that refurbished notebooks provide excellent value for money and offer a real alternative to all their customers. All refurbished products are inspected, tested and restored to manufacturer's published specifications and sold with a standard 90-day limited warranty, with an option to purchase extended warranty services.

Networking distributor ilion has released its results for the first half of 1998, showing that while turnover increased by a healthy 42 per cent, profit crashed to almost a quarter of last year's figure. For the period ending 30 June, turnover for ilion stood at £125.6 million, an increase of 42 per cent on £88.4 million for the same period in 1997. At the same time, pre-tax profit fell from £4.0 million for the first six months of 1997 to only £1.2 million for the first half of this year. In the face of what the company admitted were worse than expected results, ilion has decided to pull out of Austria, Germany and Switzerland - three of its loss making territories. The German and Swiss operations lost more than £1 million between them in the six months up to 30 June 1998. At the end of the six month period debts totalled £9.3 million, compared with £4.9 million for the same period last year. A dividend of 1p per ordinary share will be paid out on 27 November - last year's dividend stood at 2p per ordinary share. Wayne Channon, ilion chairman, blamed a slow down in the UK market for the worse than hoped for results. Investment aimed at solving year 2000 problems has partially diverted spending from the client-sever market," he said. He also said that the second half of the year was expected to bring a general upturn in sales which would boost profitability. Channon said the sales of the poorly performing foreign businesses were "at an advanced stage" and would reduce ilion net assets by no more than £1.3 million. French subsidiary Alphamega has also been disposed of, in this instance via a management buy-out led by M. Simon Tournadre for £490,000. As Alphamega sells direct to end-users - in contradiction to the clean channel policy advocated by ilion - the parent company said it was pleased to be able to offload it in an amicable fashion. ®

Computerland UK forecasts sustained growth Computerland UK is confident of sustained services business growth, chairman and MD Graham Gilbert said. In a statement made at the AGM, he revealed that trading is ahead of the comparable perid on the last financial year. The integration of recent acquisitions KDL and Netman ,which effectively doubled the size of our business, is proceeding to plan and we are actively reaping the benefits outlined at the time the acquisitions were made". Remote Support, the corporate reseller's newest division, is performing in line with expectations, he said. Computerland UK trades out of eight UK offices, concentrated in London and the Midlands. Infobank appoints new FD Infobank International Holdings has appointed David Pollock (40) as finance director with immediate effect. Pollock, who joins the ecompany from Deloitte and Touche - where he was an Auditing and Accounting partner - is expected to join the main Board in early 1999. SCH jobs push Specialist Computer Holdings is creating 250 jobs through a countywide expansion. Over 100 of these will be at the resellers' HQ and fab plant in Birmingham. The remaining 150 jobs, for engineers and sales staff, will be dotted around the company's other offices. A representative from the company said that the jobs were at least in part created by the approach of the millennium, but that long term growth prospects were good. Turnover last year was over £500 million and SCH expects that to double by 2000. SCH is the UK's largest privately owned IT group. ISG acquires French distributor ISG International Software Group the US middleware software developer is to acquire Infocom, its French distributor, for $2.5 million. Arie Gonen, President and CEO, said he expected that "Infocom, together with our UK subsidiary, will play a vital role in the marketing of ISG Navigator in Europe. It is our plan to continue expansion of our activities in Europe during the next year." ISG Navigator is available at ISG SanDisk comes to Europe SanDisk Opens Retail Sales Office in Europe; Gerrit van Hofwegen Heads New Office SanDisk, the US developer of mini-flash memory cards, has opened its first European retail sales office in Amsterdam. The company said it will "significantly" expand its network of retail distributors to increase the distribution of CompactFlash and ImageMate products to more retail outlets throughout Europe. Interested distributors can reach the company by emailing new European sales boss Gerrit van Hofwegen at [email protected] Europe currently accounts for 10 per cent of SanDisk's revenues. CWC awards IBM $3bn outsourcing deal Cable & Wireless Communications has confirmed its intention to outsource its IT functions to IBM in a $3 billion deal. Under the 10-year contract, IBM will take on 1,000 CWC staff and will hire 400 new employees. News of the impending deal was leaked last month. Primax Game bundle Primax has bundled its Excalibur joystick, Conqueror gamepad and racing game, Need for Speed. Players chose from 12 cars, race on any of eight circuits, and can challenge each other using the split screen mode. The software supports 3DFX cards and upgrades are available for those using version II software. ®

US ecommerce software developer, Sanga International has bought its way into the UK channel by snapping up Sun Microsystems reseller Relay Business Systems. The deal, for an undisclosed sum, was based on a mix of cash and shares and will see Relay effectively become the UK subsidiary of Sanga, although no name change is planned at present. Relay is an Authorised Java Centre, a Sun Academic Business Centre, a Sun Accredited Internet Associate and is an ISP in its own right. As well as its links with Sun, Relay is also an Oracle reseller; it specialises in the finance, education and healthcare markets. Sanga is less than three years old and has been moving into new territories by way of acquisition. Sanga chief executive, John Andrews, said the Relay acquisition was a logical move for Sanga. "We only partner with Sun Microsystems, so key Sun resellers are a good match," he said. "We liked Relay for a while - it is profitable, has good customers and is already established with Java and thin-client technology. Everything we do is 100 per cent Java, so there was a good fit." Andrews said he expected the UK ecommerce market to grow rapidly in the near future. "Research we've carried out leads us to believe that the UK is about six to nine months behind the US in adopting ecommerce. So, there is a lot of opportunity in this market at this time." He also said that Sanga provides a range of off-the-shelf ecommerce products that he felt would be welcomed by end-users. "As with any fledging market, users are less technically aware, so anything that makes the decision-making process easier is a good thing."®